The <a href="https://www.cryptoknowmics.com/news/crypto-control-strategy-of-sec-chair-under-scrutiny-as-ecosystems-fall">Securities and Exchange Commission (SEC)</a> <a href="https://www.cnbc.com/2022/12/08/sec-issues-new-guidance-requiring-companies-to-disclose-digital-currency-risks.html" target="_blank" rel="nofollow noopener">announced</a> new recommendations Thursday, mandating corporations that sell securities to reveal to investors their exposure and crypto risks to the industry.
<h2>Companies Should Disclose Crypto Risks</h2>
The governing body that monitors disclosures for American public businesses claimed that the recommendation was necessary in light of recent bankruptcies and financial difficulty among cryptocurrency market players that transpired this year, particularly the highly publicized collapse of <a href="https://www.cryptoknowmics.com/news/ftx-employs-forensics-teams-to-track-down-clients-lost-billions">FTX</a> and its corporate family.

The agency guideline adds that in order to comply with their disclosure duties, corporations should examine the need to implement interventions in the <a href="https://www.cryptoknowmics.com/news/microsoft-dev-0139-tackles-cryptocurrency-market-with-precision">cryptocurrency market</a> in their disclosures generally, including in their business profiles, risk factors, and management's discussion and analysis.
<h2>What to Disclose?</h2>
Companies must report whether they have any explicit or implicit ties to businesses that have gone bankrupt, had their clients' <a href="https://www.cryptoknowmics.com/news/uk-government-amends-finance-regulatory-bill-to-add-new-crypto-rules">crypto assets</a> kept unaccounted for, suffered excessive devaluations or withdrawals, or had corporate compliance issues.

Furthermore, companies had to explain how specific companies' <a href="https://www.cryptoknowmics.com/news/bankruptcy-judge-demands-return-of-44m-in-crypto-to-celsius-users">bankruptcy</a> influenced their own operations and the precautions they had to take to preserve the cryptocurrency assets of their clients.
<h2>Rule Implied Because of FTX</h2>
The announcement follows FTX's collapse, which raised concerns about financial contagion in the cryptocurrency markets and prompted intensified scrutiny of the SEC. An SEC representative told the resources that the advice would be placed online and meant to indicate the remarks we could give to public business issuers if/when relevant.

SEC Proposed New Rules For Companies to Disclose Crypto Risks

SEC announced new recommendations, mandating corporations that sell securities to reveal to investors their exposure and crypto risks to the industry.

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SEC Proposed New Rules For Companies to Disclose Crypto Risks

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